On 11 September 2007, the European Court of Justice (ECJ) delivered a preliminary ruling regarding the interpretation of Article 5(1) of the Trade Mark Directive in relation to the right of the owner of a registered trade mark to prevent a third party from using a company name which is identical to its sign. The question of interpretation had been raised in an infringement action brought by Celine SA against Celine SARL for the use by Celine SARL of the company name Celine.
According to Article 5(1) of the Directive, the owner of a registered trade mark is entitled to prevent any third party from using a sign provided that the four following conditions are met: (i) the use made by a third party must be made in the course of trade; (ii) it must be without the consent of the trade mark owner; (iii) it must be in respect of goods or services which are identical to those for which the trade mark is registered; and (iv) it must affect, or be liable to affect, the functions of the trade mark, in particular its essential function of guaranteeing the origin of the goods or services to consumers.
In its decision, the ECJ stated that the purpose of a company name is not of itself to distinguish goods and services. A company name may therefore be used without it infringing a trade mark right, as long as such use is limited to identifying the company.
The ECJ also ruled that the use of a company name may be prohibited when this use is "in relation to goods in such a way as to affect or to be liable to affect the functions of the mark". This would apply if the sign was fixed onto the goods marketed by the company name's owner, or if it was used in such a way that a link is established between the company name and the trade mark owner's goods or services.
The French courts will have to adapt their case law in light of this decision. Up until now, they had mostly regarded the use of an...